Thailand Update: December 13, 2018

January 9, 2019: Thailand Committee Call with Ambassador Virachai Plasai: Please join us for a Thailand Committee Call with His Excellency Virachai Plasai, Ambassador of the Kingdom of Thailand to the United States. Ambassador Virachai will provide an update on recent political and economic developments in Thailand and the future trajectory of bilateral relations, as Thailand assumes the 2019 ASEAN Chairmanship Year and prepares for elections in February. Click here to register for the call.

THE COUNCIL'S TAKE

New Revenue Code Amendment to Require E-Payments Disclosures

The National Legislative Assembly (NLA) has passed a Revenue Code Amendment aimed at reducing fraud, investigating tax obligations and effectively capturing tax from e-commerce businesses. Under the new amendment, any financial institution must disclose information to the Revenue Department for customer accounts with over 3000 deposits and money transfers annually of any annual amount, or accounts with more than 400 deposits and money transfers totaling over 2 million THB (roughly US$61,087) annually.

The Revenue Department has developed the amendment to better capture taxes on e-payments, as it previously lacked the necessary information to do so. The Revenue Department currently reports data showing that only 65% of juristic enterprises file tax returns, and that a large number of self-employed individuals do not pay taxes. Deputy Minister of Finance Wisudhi Sripuphan said that the bill amending the Revenue Code is intended to create more sustainable tax collection, and is not solely intended to target online traders. The Deputy Minister also noted that 2.4 million people are not in the tax system.

E-payments organizations in Thailand have expressed concern that the new tax policy could prevent widespread adoption of e-commerce payments and discourage the beneficial transition towards a more cashless society. Merchants who previously only needed to report a summary will now be required to disclose more detailed information to the Revenue Department, which will introduce additional burden. Thus, to avoid this disclosure burden, smaller merchants may prefer to use cash instead of e-payments. This reporting burden also drew comments from within the NLA, with some members stating that their own accounts would require reporting of transactions from meeting allowances and donations to Buddhist temples.

Although the Revenue Code amendment is intended to ensure fair competition and create more convenient and effective tax collection, its effect on e-commerce and e-payments may affect Thailand’s vision to become a cashless society. Thailand has emphasized the benefits of e-payments and has prioritized its goal of becoming a cashless society in its National e-Payments Master Plan and through its PromptPay e-payments system established through public-private partnership. PromptPay services began in 2017 and the service currently has 42.6 million registrants. According to the Bangkok Post, the Bank of Thailand reported 375 trillion THB (about US$ 11.4 trillion) in online transactions in June 2018, which was an increase from 250 trillion THB (US$7.6 trillion) in June 2017. Given the existing and projected benefits of e-Payments, it will be critical for the Revenue Department to develop regulation that will enable easy and increased use of e-Payments, and remove provisions that would introduce any kind of burden in the process. Such innovation-enabling and flexible legislation is crucial to the realization of the country’s goals under Thailand 4.0, which will become amplified as Thailand takes on the 2019 ASEAN Chairmanship with digital innovation as a key theme. This legislation closely follows the development of other digital economy related regulations, such as the Personal Data Protection Bill and the Cybersecurity Bill. The Ministry of Digital Economy aims to pass both of these regulations by the end of the year, prior to elections. Upon passage, it will be critical for these regulations to be transparent and in line with international best practices, especially to position Thailand as a leader in digital economy development, in line with its ASEAN Chairmanship themes to advance digital prosperity and innovation.

National Council for Peace and Order (NCPO) Officially Lifts Ban on Political Parties

In another sign that the much-anticipated and oft-delayed elections could be underway in 2019, the National Council for Peace and Order (NCPO) has lifted its ban on political parties on December 11. Up to this point, the NCPO had only partially relaxed the ban (see more information on the partial lift in our previous Update here). According to the Bangkok Post, the full lift of the ban will occur when the law on MPs, the last organic bill on elections, takes effect, which will also set a 150-day deadline for the election. The chain of events following this timeline will set the general election for February 24 and see a new government by May 2019. For more information on the general election timeline, see our previous Thailand Update here.

The Bangkok Post reports that the NCPO confirmed it will lift nine key orders restricting political activities, and that it proposed the February 24 election date at a December 7 meeting with political party members, representatives of the National Legislative Assembly (NLA), the Election Commission (EC) and the Constitution Drafting Committee. Two major parties – the Democrats and Pheu Thai – opted out of the meeting.

The February 24 election date must still be officially announced by the EC, which is likely to happen on January 4,two days after a royal decree to hold an election is granted. Though the lifted ban will allow for political campaigning to commence, it remains unclear how freely parties may be able to campaign, particularly if the ban on the gathering of more than 5 people for political purposes remains intact. . NCPO Chief and Prime Minister Prayut Chan-o-cha, who may also be nominated as a candidate in the upcoming elections, recently stated that an elections campaigning “framework” is necessary to see a smooth transition to democracy, although there are not yet details on what this framework would consist of and if it is currently in development by the Government. The full lift of the ban on political activities is a highly-anticipated and positive step along the election roadmap; however, lifting the ban only about two months before the proposed election deadline may appear to not grant enough time for parties to sufficiently campaign. For example, in both the Malaysian elections last year and the Indonesian elections this year, candidates began campaigning nearly a year before the election dates, which is considered typical, and sufficient, time for campaigning. To appear equitable with its ASEAN neighbors, Thailand may need to consider pushing back its election date, which has a set deadline of May 5, to allow for greater campaigning time.

ADVOCACY UPDATE

Thailand Draft Cybersecurity Bill: Thailand's draft Cybersecurity Bill was revised following a public hearing period that ended in October. The Council submitted comments for this public hearing on October 12. On December 5, 2018, the US-ASEAN Business Council was provided a revised version of Thailand’s Draft Cybersecurity Bill (exclusively in Thai). This version of the Bill makes heavy revisions to the section on the National Cyber Security Committee, and smaller revisions throughout the rest of the Bill. The Council is seeking members' comments on the latest revision of Thailand’s Draft Cybersecurity Bill by EOD December 18 SGT.Please find attached the revised bill in Thai and an English translation provided by a US-ABC member. Please submit all comments on the Thai Draft Cybersecurity Bill to Ella Duangkaew (eduangkaew@usasean.org) or Praab Pianskool (praab@usasean.org).

Ministry hastens to make CPTPP deal before FebruaryBangkok Post 4th Dec 2018
The Commerce Ministry is speeding up concluding talks for Thailand to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), aiming to join this pact before the general election next February. The ministry will soon propose the pros and cons of this trade pact to Deputy Prime Minister Somkid Jatusripitak for acknowledgment.

Regional Affairs

Trade Department pushes 12 priorities for Asean chairBangkok Post 3rd Dec 2018
Twelve economic issues, including the conclusion of negotiations on the Regional Comprehensive Economic Partnership, have been proposed for consideration as Thailand readies itself to assume Asean's chairmanship. Thailand had announced "Advancing Partnership for Sustainability" as the theme for its chairmanship next year.

National Affairs

Royal Gazette publishes NCPO’s order to lift political banNational News Bureau of Thailand 12th Dec 2018
Thailand's National Council for Peace and Order (NCPO) has finally lifted political restrictions imposed since 2014, allowing political gatherings and election campaigns ahead of next year’s general election.

Election officers to be appointed early Jan 2019National News Bureau of Thailand 7th Dec 2018
The Election Commission (EC) is accepting registrations from candidates for the positions of Electorate Director and District Election Officer. They can register at district offices nationwide until 7th December 2018.

Political parties' meeting tomorrow to reveal clearer election dateNational News Bureau of Thailand 7th Dec 2018
The Deputy Prime Minister, Dr. Wissanu Krea-ngam, said the date for the next general election should be clearer after a meeting with key members of different political parties tomorrow (Dec 7), while the National Council for Peace and Order (NCPO) will make a decision on the lifting of the ban on political activities.

DSD, TIFFA provide training for unemployed graduatesNational News Bureau of Thailand 7th Dec 2018
The Department of Skill Development (DSD) and the Thai International Freight Forwarders Association (TIFFA) have arranged a training program for unemployed graduates. The program aims to feed more quality workers to logistics and international trade.

Report: Thailand most unequal country in 2018Bangkok Post 6th Dec 2018
Thailand has overtaken Russia and India as the most unequal country in the latest survey by a Swiss bank. Banyong Pongpanich, chairman of Phatra Securities, posted on Facebook on Wednesday the findings of the Credit Suisse Global Wealth Databook 2018 conducted on 40 countries.

Govt prepares anti-human trafficking progress reportNational News Bureau of Thailand 5th Dec 2018
The Ministry of Social Development and Human Security is preparing to submit a progress report on Thailand's anti-human trafficking efforts to the United States to demonstrate the country's commitment towards the issue. The anti-human trafficking committee, chaired by Minister of Social Development and Human Security Gen Anantaporn Kanchanarat , approved the 3rd draft of the 2018 report on the prevention and suppression of human trafficking in Thailand.

Thailand’s foreign election observer ban is an unusual stepThe Jakarta Post 3rd Dec 2018
Thailand’s Foreign Minister Don Pramudwinai made news in early November when he announced that he saw no need for foreign observers to monitor the country’s general elections which are expected to take place between February and May of 2019.

Defense & Security

Thailand’s military is working to further link major weapon systemsDefense News 11th Dec 2018
The words “network-centric Air Force” are emblazoned all over the buildings that make up the Royal Thai Air Force’s Wing 7, located at Surat Thani Air Force Base, southern Thailand. One could find it in conference rooms, in promotional videos created to highlight the wing’s significance and on a mural in one space where pilots grab coffee between briefings or sorties.

Office of SME Promotion launches global connectivity program for SMEsNational News Bureau of Thailand 13th Dec 2018
The Office of Small and Medium Enterprise Promotion (OSMEP) is launching a global connectivity program for SMEs designed to push local products onto the world market. Director of the OSMEP Suwanchai Lohawatanakul said, since 2016, his office has been working with governmental agencies to integrate SME networks, resulting in up to 17 billion baht in economic value. This year alone, OSMEP initiated 4 key programs that generated 4.19 billion baht in revenue and brought SMEs into important networks such as digital content and food trucks.

130 SME training projects due 2019 by NEABangkok Post 13th Dec 2018
The New Economy Academy (NEA), which is tasked with upgrading small and medium-sized enterprises (SMEs) and teaching them e-commerce methods, aims to help at least 250,000 entrepreneurs through 130 training projects in 2019, in part to improve Thai competitiveness.

Bank of Thailand treads gently on fee chargesBangkok Post 7th Dec 2018
The Bank of Thailand will take into account access to banking services and familiarity with technology before making a decision on banks' proposal to charge fees for cash transactions at branches and ATMs, a senior official says. The central bank must also consider the readiness of financial services across the country, said Chantavarn Sucharitakul, assistant governor for corporate strategy and relations.

Energy

Min of Energy to use raw palm oil for natural gas productionNational News Bureau of Thailand 7th Dec 2018
The Ministry of Energy, together with the Electricity Generating Authority of Thailand (EGAT), is preparing to utilize raw palm oil for natural gas production at the Bangpakong Thermal Power Unit in Chachoengsao province, confirming that the increased cost will not be shouldered by the public.

Thai Oil poised to start Clean Fuel ProjectBangkok Post 6th Dec 2018
SET-listed Thai Oil Plc (TOP), Thailand's biggest oil refiner by capacity, aims to proceed with investment in the Clean Fuel Project (CFP) after several years on the drawing board. The project is set for development spending during 2019-22 at a total cost of US$4.73 billion. Chatchai Siriwit, Thai Oil's investor relations manager, said the CFP is designed to improve productivity and lean operating costs because several new oil refineries across Asia-Pacific have developed operations over the last few years.

Food & Agriculture

20-year water plan tipped for approvalBangkok Post 7th Dec 2018
The 20-year master plan for the country's water management system is expected to win approval by the national committee on water resources on Dec 19 after which it will be implemented, Deputy Prime Minister Chatchai Sarikulya said Thursday. The master plan was approved by the government's sub-committee on strategies for water resources management, said Gen Chatchai.nt.

Govt approves financial assistance for rubber growersNational News Bureau of Thailand 7th Dec 2018
The Rubber Authority of Thailand (RAT) is to begin registering farmers that qualify for the government's rubber subsidy program. Those who qualify include more than 999,000 rubber growers and over 304,000 rubber tappers who registered with the RAT before November 14th this year, amounting to over 9.4 million rai. Farmers can register for the program between December 6th this year and February 28th, 2019. Their applications will be submitted to the Bank for Agriculture and Agricultural Cooperatives (BAAC) which will provide financial assistance of 1,800 baht per rai, not exceeding 15 rai.

Thailand leads charge to protect soilBangkok Post 6th Dec 2018
Thailand launched the Centre of Excellence for Soil Research in Asia (Cesra), the world's first regional hub to promote sustainable soil management, to mark Wednesday's World Soil Day. Located on an 800-rai plot of land in Nakhon Ratchasima's Pak Chong district, Cesra was established with an aim to promote sustainable soil management and a reliable exchange of soil data and information at the global and regional level via research and development as well as capacity building programmes, said Rapibhat Chandarasrivongs, assistant permanent secretary of the Ministry of Agriculture and Cooperatives.

Thailand secures orders for more than 300,000 tons of riceNational News Bureau of Thailand 4th Dec 2018
China and the Philippines have together placed orders for over 300,000 tons of Thai rice to the benefit of end of year growers. Department of Foreign Trade (DFT) Director-General Adul Chotinisakorn says that 100,000 tons of newly grown 5% white rice will be sent to COFCO in China, which previously purchased six batches of Thai rice. Another 80,000 tons of 25% white rice is to be delivered to the Philippines’ government in December.

Commerce Ministry promotes dairy products export under FTA dealingsNational News Bureau of Thailand 3rd Dec 2018
The Ministry of Commerce is encouraging farmers and dairy manufacturers to penetrate export markets under FTA dealings. Commerce Minister Sonthirat Sonthijirawong said the Ministry of Commerce has signed an agreement with the Department of Trade Negotiations, the Department of Livestock Development, the Food Innopolis project, the Diary Cooperatives Association of Thailand, and Thammasat Consulting Networking and Coaching Center, to prepare Thai dairy industry for the opening of FTAs between Thailand and Australia, and between Thailand and New Zealand.

New rubber price subsidy is 'unfair', says RNRFBangkok Post 29th Nov 2018
The Rubber Network Council and Rubber Farmers Institute of Thailand (RNRF) is opposing the cabinet's resolution to implement a new rubber price subsidy programme, saying the decision is unfair to over 8 million rubber farm workers who won't benefit from the subsidy.

Government to 'streamline' health fundsBangkok Post 13th Dec 2018
The government is planning to revamp its medical welfare management system to ensure all citizens can benefit from existing healthcare funds, said the chairman of a sub-committee on public health reform. "Our goal is to ensure that every citizen has equal access to the privileges accorded by the government's three healthcare funds," said Phirom Kamonratakun on Wednesday at a seminar on Universal Health Coverage Day.

Vegetables and fruits in student lunches heavily contaminated with toxic chemicals Thai PBS World 13th Dec 2018
Vegetables and fruits found in lunches for students under the government-sponsored lunch programme are almost 100 percent contaminated with pesticides and 99 percent of the urine samples from students and teachers in four provinces were tested with organophosphate, a deadly toxic pesticide that attacks nervous system.

DDC urges parents to get their children vaccinatedNational News Bureau of Thailand 7th Dec 2018
The Department of Disease Control (DDC) has warned parents to make sure that their children are fully vaccinated against common diseases during the winter months. The DDC Director-General, Suwannachai Wattanayingcharoenchai, said the general public should start protecting themselves and their children from diseases commonly found during winter.

Prawit orders clampdown as drugs worth Bt4.5 bn seizedThe Nation 5th Dec 2018
A month of huge drug hauls worth more than Bt4.5 billion in total has triggered alarm at the extent of narcotics-trafficking in Thailand and brought renewed efforts by authorities to curb the problem. In November, authorities arrested 12,118 drug suspects.

Public Health Ministry aims to end AIDS problem by 2030Thai PBS World 3rd Dec 2018
On the occasion of the World’s AIDS Day on December 1, the Ministry of Public Health has set a target to resolve AIDS problems by reducing the number of new cases of people infected with HIV to a maximum of 1,000 and the fatality rate of AIDS sufferers to not exceeding 4,000 cases per year by the year 2030. At the same time, the ministry aims to reduce the rate of discrimination and stigmatization to people with AIDS by up to 90 percent.

ICT

DEPA offers tax deduction up to 200% for software purchases by SMEsNational News Bureau of Thailand 13th Dec 2018
The Digital Economy Promotion Agency (DEPA) has devised a measure to promote software usage, offering tax deductions of up to 200 percent of the value of a computer program suited to business operations. DEPA Director Nuttaphol Nimmanpacharin said today that the agency is looking to benefit SMEs through the use of computer programs and technological tools in line with the Thailand 4.0 policy. Businesses that adopt inventory software, accounting software or retail software can use receipts from their purchases to receive a tax break up of to 200 percent of the value of the acquisition.

E-commerce players up in arms over taxBangkok Post 7th Dec 2018
The government's tax collection policy is threatening the growth of e-payments and discouraging a cashless society, say e-payment and e-commerce proponents. The Bank of Thailand reported that the value of e-payments in June 2018 was 38.94 trillion baht, up from 33.56 trillion a year earlier. The volume of e-payment transactions in June 2018 totalled 375 trillion, up from 250 trillion the previous June.

700MHz auction postponed from February to 3rd quarterBangkok Post 7th Dec 2018
The telecom regulator has extended the timeline for the 700MHz spectrum auction from the original date in February 2019 to the third quarter. The soonest the 700MHz range could be used for wireless broadband service, 5G in particular, would be in early 2020, in line with the government's roadmap for 5G adoption in the country, said Col Natee Sukonrat, vice-chairman of the National Broadcasting and Telecommunications Commission (NBTC).

Plan to shepherd 600,000 SMEs into e-commerce next yearBangkok Post 7th Dec 2018
Roughly 600,000 small and medium-sized enterprises (SMEs) will be brought into the government's measures for better accessibility of the e-commerce platform in 2019 in a bid to increase their competitiveness in the global market, says Deputy Prime Minister Somkid Jatusripitak.

NBTC begins relaxing auction payment processBangkok Post 4th Dec 2018
The telecom regulator plans to extend the payment period for the 900- and 1800-megahertz licences, and redesign the auction conditions and spectrum evaluation to ease the financial burdens of mobile operators, all in an effort to draw 5G investment.

Thailand Revenue Department to Track VAT Payments using BlockchainCCN 4th Dec 2018
In 2014, the Revenue Department of Thailand had arrested many individuals and investigated about 60 companies for defrauding the department out of $18.29 million worth of baht in value-added taxes (VAT). Since and before, the department has been unable to track a majority of such tax defaulters, losing billions of dollars in the process. So could blockchain be the solution that could minimize tax frauds? The director-general of the Revenue Department believes it can.

Thailand’s SEC Clarifies How Laws Can Apply To Crypto Asset SecuritiesBitcoinExchangeGuide 1st Dec 2018
The Thailand Securities and Exchange Commission (SEC) has decided to explain how already existing laws could be applied to crypto securities. Another thing to mention is that Thai companies that are planning to issue securities tokens abroad need to follow specific regulations. The information was released a few days ago by the Bangkok Post. According to the Bangkok Post, regulators are still not sure how to deal with securities token offerings (STO). To be clear, these STOs are crypto tokens that are backed by real assets, including gold or real estate. While IPOs are regulated under the Securities Act, Initial Coin Offerings (ICOs) follow the Digital Asset Act.

Infrastructure

Transport Minister updates on high-speed rail projectNational News Bureau of Thailand 13th Dec 2018
Thailand's Minister of Transport has inspected Nong Khai railway station as part of mobile cabinet meeting in upper northeastern provinces. Transport Minister Arkhom Termpittayapaisith says the mobile cabinet will focus on the projects in the upper northeastern provinces of Loei, Nong Bua Lam Phu, Udon Thani, Nong Khai and Bung Kan . The Ministry of Transport will report the progress on several projects to the cabinet, mostly on the highway and rural road projects including a discussion between government and private sector to develop the road network in this cluster.

Thailand on track to develop into regional rail hubNikkei Asian Review 7th Dec 2018
Thailand is in the midst of an ambitious railway development drive aimed at weaning the country away from autos to more eco-friendly train transportation while transforming into a regional rail hub. The government will spend more than $25 billion to build a high-speed rail network, of which 16 billion baht ($485 million) has been earmarked for the new Bang Sue Grand Station in Bangkok.

Investors flock to Thailand’s EEC projectThe ASEAN Post 4th Dec 2018
Thailand’s Eastern Economic Corridor (EEC) is slated to be an arterial node for trade, investment, and regional transportation, besides also serving as a strategic gateway to the Southeast Asian region. Stretching a total area of 13,000 square kilometres – encompassing the eastern provinces of Rayong, Chonburi and Chachoengsao – it is part of the government’s wider Thailand 4.0 plan to transform the Thai economy into Southeast Asia’s engine of growth.

Commerce Ministry developing logistics support for online SMEsBangkok Post 1st Dec 2018
The Commerce Ministry is introducing a logistics strategy and measures to help empower Thai small and medium-sized enterprises (SMEs) to cope with a flood of overseas online providers. Commerce Minister Sontirat Sontijirawong said after talking with more than 10 leading logistics and warehouse operators, startup and e-marketplace operators, the group agreed to set up a joint working panel to map out measures and logistics to help SMEs benefit more from digital platforms.

Manufacturing

Chinese Producers Fleeing Trade War Buoy Leading Thai DeveloperBloomberg 1st Dec 2018
The upheaval in global supply chains triggered by the trade dispute between the U.S. and China is benefiting the largest developer of industrial estates in Thailand. Land sales have begun to surge at WHA Corp., partly because of demand from Chinese manufacturers seeking alternative production sites to skirt U.S. tariffs, according to David Nardone, the group executive for the company’s industrial-development unit.

Travel & Tourism

Why tourists are to blame for Phi Phi Islands’ water shortageSouth China Morning Post 12th Dec 2018
According to the article, researchers from Kasetsart University found that freshwater sources on the 9.7 sq km island cannot meet demand from the rising number of visitors, particularly during peak season. Sitang Pilailar, Kasetsart’s lead researcher, told The Nation, “During the driest period of the year – from November to April – the island is packed with tourists, causing water demand to rise sharply, and meanwhile there’s no rain to refill the two freshwater ponds that are the only sources for piped water on the island.”

Tourism’s influence on Thai politicsThe ASEAN Post 4th Dec 2018
A recent news report in Thailand has revealed that Thai netizens do not believe official government statistics regarding the actual number of tourist arrivals to the country. Several readers of a popular local news portal wrote similar comments in response to a statement made by the Sports and Tourism Minister. Some even made snide remarks attempting to point out just how ludicrous the statement was.

Chinese will be first to get access to Thai e-visa serviceBangkok Post 3rd Dec 2018
The Consular Affairs Department will launch its first e-visa service in February, starting with it being available in Beijing with a plan to gradually expand to other countries over three years. The department annpounced on Monday it had joined with Kasikornbank, which will handle the payments side, in making the service available.

UNESCO lists Khon as an intangible cultural heritage of humanityPattaya Mail 2nd Dec 2018
The Department of Cultural Promotion has set out plans to promote the Thai Khon performance throughout 2019 after it was accepted by UNESCO as an intangible cultural heritage of humanity. The department represented Thailand at the recent 13th meeting of UNESCO’s Intangible Cultural Heritage Commission and submitted Khon for consideration.